FTSE bounce fails to hold as we return to key support
The bounce we saw mid-week in the FTSE has failed to hold with a strong Friday sell off providing the platform for today’s significant gap lower on the open. This has brought us back to the 38.2% retracement support level (6723), which is in close proximity to today’s low so far.
The question is whether we will break below this level for another round of selling to ensue. Given the relative brevity of the move higher last week, I am inclined to believe we will see a break below 6723, yet until that happens I am more neutral as a second bounce higher also seems likely. Clearly these markets are significantly impacted by the Greek crisis and as it stands, there is not going to be any positive resolution for some time. This could drag the indices lower yet.